Oregon Construction Contractors (CCB) Practice Test

How long should general business records be kept according to standard practices?

1. 10 years

2. 3 years

3. 7 years

4. 6 months

The correct answer is: 7 years

General business records should be maintained for a period of seven years, which aligns with standard accounting and tax practices. This duration is significant because it allows businesses to retain important documentation in case of audits or inquiries regarding tax returns. The Internal Revenue Service (IRS) typically recommends keeping tax records for seven years, particularly if the return involves underreported income. Retaining records for this period serves to safeguard a company's interests and ensure compliance with legal requirements. While some records may have shorter retention periods, such as three years for certain types of documents, seven years is the more widely accepted timeframe for a broad range of general business records. This includes financial statements, invoices, and other critical documents that could be scrutinized during audits or assessments.